Relates to allowing alcoholic beverages as prizes in any game of chance

Section 2: Creates restrictions for raffles that award prizes containing alcohol.

Section 3: Sets the effective date immediately.

Justification

This legislation looks to cut unnecessary, over burdensome and outdated bureaucracy around prizes offered for charitable gaming, while promoting charitable donations and helping nonprofits with their fundraising activities.

Currently, New York State Law prohibits charitable organizations participating in a game of chance to raffle off prizes that contain alcohol. Though State Law outlaws this action, most charitable gaming organizations do not know this is illegal and partake in the activity as a form of common practice. It is common for a local winery, brewery, or beverage distributor to donate a basket of their products to a charitable organization to help raise money for the cause the charitable organization supports.

The prohibition on alcohol as a prize came about in 1976, when the laws around charitable gaming first came into existence due to a constitutional amendment that the voters approved in the 1975 general election (Article I, S9) - which permits localities to authorize, subject to state legislative supervision and control, the conduce of games of chance events.

According to the 10 day budget report of this legislation in 1976, the voter referendum on games of chance came about because games of chance operations were being conducted by charitable and service organizations on a widespread and open basis, although such games were illegal.

This legislation looks to make changes to the laws of 1976 for similar reasons, with raffling off alcohol as a common, widespread practice - although such activity is illegal. This new legislation will clarify confusion within the beverage industry and charitable gaming groups, while accelerating the growth of craft beverages, beer, wine and spirits industries and bona fide charitable and service organizations.

Craft breweries, wineries and distilleries often donate products to charities as in-kind donations, as a way to help the charity while at the same time, promoting their products. We should not be restricting the growth of one of New York's fastest growing industries. Wineries, cideries and brewery businesses in New York State have showed consistent and significant growth over the last few years and are putting themselves at legal-risk when they donate their products to charities as in-kind donations for raffle purposes.

According to the New York State Brewers Association, the number of New York State breweries grew from 95 in 2012 to 207 in 2014, making them 3rd in the country with an Economic Impact of $3.5 Billion dollars. In 2012, New York State was the 6th largest beer producing state behind California, Pennsylvania, Colorado, Ohio and Oregon. New York State craft breweries increased production by 26% from 557,436 in 2011 to 859,536 barrels in 2012, while at the same time nationally, the craft beer segment only grew by 15%.

According to the New York Wine and Grape Foundation, the New York grape, grape juice and wine industry generates more than $4.8 billion in economic benefits annually for New York State. New York is home to over 1,600 family vineyards and over 400 wineries, producing more than 175,000,000 bottles of wine per year while providing $408 million in state and local taxes.

While the local beverage industry is growing, charitable gaming revenue has remained stagnant. Groups that participate in charitable gaming are authorized organizations, defined as any bona fide religious, charitable, educational, service, veteran or volunteer fire organization which operates without profit to its members. These organizations foster and support worthy causes and undertakings that the majority of the electorate support. The raffles they host are one of the many fundraising techniques the organizations use. Raffling off donated products helps promote the product itself, while providing the charitable organization one-hundred percent profit - a win for both the charity and business.

Prior legislative history

None.

Fiscal implications

None.

Effective date

This act shall take effect immediately.